PDA CEDS 2006

Peninsula Development
Association
Clallam & Jefferson Counties

Comprehensive Economic Development Strategy


2006
Peninsula Development Association
P.O. Box 1085
Port Angeles, WA 98362
Tel: 360.457.7793
Fax: 360.452.9618
E-Mail: lrotmark@clallam.org

Comprehensive Economic Development Strategy
Peninsula Development Association – 2006

PREFACE

The Peninsula Development Association (PDA) serves the people of Jefferson and Clallam Counties. Its main objective is to provide a cooperative platform for planning, development and implementation of local and regional plans, programs and projects that will increase the economic activity in the area and improve the quality of life for the people of the North Olympic Peninsula.

This document reviews the history and purpose of PDA, describes its strategic planning process, and summarizes the resulting goals, objectives and strategies. The update encompasses four subject areas. First, it reviews some of the methodology of creating wealth in the economy of the region. Secondly, labor force size, unemployment and population figures are examined to ascertain the direction of their changes. Also included are the PDA goals and finally, outlines of the individual entity’s economic strategies. It should be noted here that almost all jurisdictions within the North Olympic Peninsula are currently updating and approving their economic development elements of their respective comprehensive plans.

INTRODUCTION

The economic partners of the North Olympic Peninsula must recognize that the retention of a regional competitive advantage operate as a system. Therefore, policies in many areas are interdependent; and usually exhibit benefits only in the long run.
It should be understood that the PDA best serves the region when it supports communities recognition and response to changing conditions and opportunities. Therefore, the PDA should implement economic development strategies that assist its partners to:
• Leverage human capital and indigenous assets while making every effort to diversify its economic base.
• Ensure that the region maintains a qualified workforce by developing a community that embraces change and has access to high quality life-long learning.
• Align community resources in the creation of a diverse set of job opportunities in sustainable industry sectors with a focus on raising the average wage in Clallam and Jefferson Counties.
• Become a community of creative solutions where government, education, and business recognize, appreciate and adopt an entrepreneurial spirit.
• Make every effort to ensure that our communities’ physical infrastructure (roads, waterborne transportation, sewer, water, telecommunications, broadband, etc.) and human infrastructure (education, healthcare, public safety, housing and social support, etc.) keeps up with growth in a well-planned, cost effective way.
• Be an active participant in regional economic development initiatives with a focus on sustainable economic development projects.

STRATEGIC HIGHLIGHTS

Over the past few years, the PDA recognized that traditional measures taken to attract outside investment simply would not pull the region from the depths of a failing economy. Therefore, several new thought streams emerged relative to stabilization and expansion of the North Olympic Peninsula’s economic base.

• Successful regions build on their inherited assets (e.g., geography, diverse lifestyles, population, educational opportunities, businesses, governmental organizations) to create specialized economies that both differ from other regions and offer comparative advantages to local companies.
• Building strong regional economies takes a long and sustained effort. There are many steps in building a regional economy - developing inherent assets, creating new assets, linking companies to these assets, attracting outside companies.
• Successful regions do not rely on chance, but rather seek to institutionalize the innovative process by building strong educational and skill development centers to create continuous innovation and entrepreneurship.
• Small to medium sized enterprises are the greatest source of jobs and thus must be targeted for support in regional initiatives.
• Community economic development that helps the most disadvantaged help themselves; i.e. gain economic independence and sustainability.

PDA's Mission

PDA's mission is to foster a cooperative effort in planning, development and implementation of local and regional plans, programs and projects that will increase the economic activity in the area and improve the quality of life of its citizens.

PDA's Vision

The North Olympic Peninsula will become a region with an educated and trained workforce, healthy people, a sound physical infrastructure, a dynamic economic base and the local and regional capacity to be economically self-sustaining.


HISTORY OF PDA

The Peninsula Development Association has been recognized as the major development organization for the North Olympic Peninsula in the State of Washington. On October 31, 1984, PDA was formed as a non-profit corporation to promote economic and community development in cooperation with local government, businesses and private organizations. It responsibilities are that of a regional associated development organization.

PDA's main objective is to foster a cooperative effort in planning, development, and implementation of local and regional plans, programs and projects which will increase the economic activity in the area and improve the quality of life of its citizens. In order to accomplish this objective, PDA:

1. Represents the district-wide economic development program. As an Economic Development Administration (EDA) District, PDA has prepared a Comprehensive Economic Development Strategy (CEDS) that establishes a framework for long-range economic prioritization in the multi-county area.

2. Promotes assistance to businesses in PDA's two-county area. PDA serves as a regional link between the private sector and the government agencies.

3. Researches federal and state grant-in-aid programs in order to identify the proper funding source for local or regional projects;

4. Provides technical and planning assistance to local governments in preparing project applications for federal and state funding assistance;

5. Promotes cooperative arrangements and contracts among its members or other governmental agencies and private persons, corporations or agencies;

6. Assists in comprehensive planning for public facility projects within the region either directly by PDA personnel or through other public or private planning agencies;

7. Studies regional and local services and facilities affecting health, affordable housing, telecommunications, training, infrastructure, childcare, education/workforce training, land use and development;


PDA’s STRUCTURE

The PDA membership is comprised of representatives of the Counties of Jefferson and Clallam and includes representatives from the Board of Commissioners of each county, tribal communities, and representatives’ at-large of employment, education, labor.

A Board of Directors oversees the administrative functions of the PDA effort. The Executive Board consists of not less than eleven (11) and not more than twenty-one (21) members. Fifty-one percent of the Board of Directors must be elected officials. Representatives selected to serve on the Executive Board are named at the first meeting of each fiscal year and serve for the respective fiscal year. The following is a list of people who comprise the PDA membership (2006):

Officers:
Bill Hannan, President Port of Port Angeles
Jay Bennett, Vice-President Diversified Resources, Inc.
Herb Beck, Secretary/Treasurer Port of Port Townsend

Directors:
Katherine Baril Washington State University Extension-Jefferson County
John Beitzel City of Sequim
Ryland Bowechop Makah Tribal Council
Gary Cohn Port Angeles School District
Larry Crockett Port of Port Townsend
Bill Elliott (Alternate) City of Sequim
John Fischbach Jefferson County
Rod Fleck (Alternate) City of Forks
Hugh Haffner PUD of Clallam County
Marny Hannan Sequim-Dungeness Valley Chamber of Commerce
Marlin Holden Jamestown S’Klallam Tribe
Anthony Ingersoll North Olympic Peninsula Resource and Conservation District
Merle Pender Employment Securities Dept.
Wayne King Jefferson County PUD
Laurie Medlicott City of Port Townsend
Mary O’Neil-Garrett Peninsula College
Jim Parker (Alternate) Jefferson County PUD
Clyde Rasmussen (Alternate) North Olympic Peninsula Skills Center
Nedra Reed City of Forks
Karen Rogers City of Port Angeles
David Sullivan (Alternate) Jefferson County
Steve Tharinger Clallam County
Betsy Wharton City of Port Angeles

EDC Director
Linda Rotmark Clallam County EDC

CHANGE IN PDA REGION

Population 1990-2004 and Projections to 2015
County/State 1990 1995 2000 2001 2002 2003 2004 2010* 2015*
Jefferson 20,406 24,112 26,299 26,446 26,600 26,700 27,000 30,892 34,067
Clallam 56,204 61,461 64,179 64,454 64,900 65,300 65,900 67,754 70,769
State 4,866,692 5,470,104 5,894,121 5,974,900 6,041,710 6,098,300 6,167,800 6,648,112 7,096,501
Source: US Census and WA-OFM
*Projections

PDA Region Population 1990 2004 % Change
Jefferson 20,406 27,000 32.31%
Clallam 56,204 65,900 17.25%


Median Household Income 2000 2001 2002 2003 2004 2005 2005 % of WA
Clallam County $38,052 $39,702 $39,863 $40,124 $41,108 $42,367 81.8%
Jefferson County $39,122 $40,923 $41,385 $40,852 $41,801 $42,620 82.3%
State of Washington $48,397 $49,286 $49,771 $50,664 $51,762 $51,794

EMPLOYMENT/UNEMPLOYMENT

Clallam County Jefferson County Washington State
2004Total Employment 24,950 12,030 3,012,900
Total Unemployment 1,490 580 193,700
Percent of Labor Force 5.6% 4.6% 6.0%
Civilian Labor Force 26,440 12,610 3,206,600

2003Total Employment 23,790 11,250 2,902,900
Total Unemployment 1,920 740 237,000
Percent of Labor Force 7.5% 6.2% 7.5%
Civilian Labor Force 25,710 11,990 3,139,900

2002Total Employment 23,310 10,870 2,882,600
Total Unemployment 1,880 770 226,700
Percent of Labor Force 7.5% 6.6% 7.3%
Civilian Labor Force 25,190 11,640 3,109,300

2001Total Employment 22,520 10,580 2,830,600
Total Unemployment 1,890 650 193,400
Percent of Labor Force 7.7% 5.8% 6.4%
Civilian Labor Force 24,410 11,230 3,024,000

2000Total Employment 23,030 10,420 2,896,300
Total Unemployment 1,900 590 159,300
Percent of Labor Force 7.6% 5.4% 5.2%
Civilian Labor Force 24,930 11,010 3,055,600

FUTURE EFFORTS

It is imperative that several key linkages be focused upon if the PDA is to assist its community partners in achieving economic health in the immediate term.

Infrastructure investment within the PDA region is crucial. However, the costs associated with increased environmental compliance regulations will affect local communities with small population base in regions like the North Olympic Peninsula. Within the past decade, regulations have increased considerably on the monitoring of public drinking water, wastewater, solid, hazardous and infectious waste, and air quality. Increased environmental regulations also have significant implications for the North Olympic Peninsula’s economy. PDA must take an aggressive leadership role in shaping policies at federal and state levels.

While the natural topography of the region presents many challenges to infrastructure improvements and affordable housing, it affords many opportunities for tourism development. The region contains a variety of marine adventure experiences, numerous state and county recreation areas and is home to the Olympic National Park (ONP). With such outdoor amenities, many recreational activities are available. The future financial stability of the ONP and its impact on the PDA region will be felt in tourism and job creation. For tourism to be an effective economic development strategy, its continued growth within the PDA region relies on the establishment of adequate infrastructure and increased public and private financial investment.

The economic outlook for the PDA region is looking brighter. There are, however many challenges that still face the workforce of the North Olympic Peninsula. The chronic economic barriers created from a reliance on an under-diversified economy, combined with a changing national economy, have resulted in under-employment, lower per capita income and increased poverty. While welfare reform has been successful in targeting training opportunities for the chronically unemployed, individuals who are under-employed often have fewer options in improving their skill level. The under-employed also share common barriers in obtaining and keeping employment such as the cost of child and elder care.

The good news is that the two counties are making progress in the region by using an industry ”cluster” approach as opposed to a traditional ”business recruitment” approach. Cluster collaboration acts as a tool to better understand the economy and utilize indigenous assets strategically. It also act as an organizational tool to engage industry leaders in a regional strategy and to foster communication, networking and improvement among the companies within clusters and across clusters. The appropriate entity must conduct regular asset mapping of their respective communities to ascertain current information for potentially new “clusters,” along with the development and maintenance of cluster strategic plans.

The PDA must assure that respective North Olympic Peninsula governments are supporting regional business development through creation of new capital and entrepreneurial programs. An entrepreneur can succeed anywhere but they are likely to be more successful in areas that have diversity in sources of capital, an enabling culture, strong local networks, and supportive infrastructure. Government leaders must facilitate and support private networks and create a regional commitment to entrepreneurial growth. The North Olympic Peninsula must continue to send out a clear message that they encourage and support entrepreneurship.

PDA must lead the establishment of public-private sector financial partnerships that espouse a commonly held vision and priorities for facilitating new business investment. This can be accomplished by strategically targeting local financial investments. Upon successful completion, market regional strengths to existing and potential investors by establishing and maintaining up-to-date information systems, mapping regional assets, providing information and advisory services, and streamlined investment facilitation processes.

PDA Identified Concerns

The PDA Board of Directors met on April 5, 2006 and identified several issues of concerns that the regional body should look at developing strategies addressing the concerns.

Workforce Development

Education and workforce training are crucial components of a regional economic development strategy, and skilled workforce is among the region’s most important assets. The importance of higher education in preparing students for high-paying jobs cannot be overstated. However, while traditional four-year and advanced degrees offer students the greatest range of post-graduation options, universities are not the only routes for obtaining skills that are in demand. A region’s education and workforce development system should encompass a wide range of options for people to obtain the tools necessary for succeeding in today’s labor market, including four-year university degrees, two-year degrees at community colleges, specialized certificate programs, and short-term training programs.

The region’s workforce is its most valuable asset for achieving sustainable economic development, but the advantages of higher education in today’s job market are not spreading to all citizens of the region equally. The transition from a manufacturing-based to a service-based, or “knowledge-based,” economy in the U.S. has put a premium on education and skills that allow for adaptable, life-long learning. Highly innovative companies require employees who are skilled in technical fields, such as math and science, but also have strong command of writing, business principles, and the capacity for creativity that drives innovation.

Skilled workforce is such a strong asset in the region that all economic development strategies must be built around it. We must continue to emphasize life-long learning and skill development to all segments of the workforce. As the technology downturn in 2001 showed, workers must have the ability to transfer knowledge and skills to industries in order to avoid unemployment or underemployment when an industry declines. In addition, a regional strategy in 2005 to address the large gaps in higher education attainment would be beneficial in terms of social equity and sustainable economic development. Diversity is an asset, and building human capital among all groups benefits the entire citizenry.

Affordable Housing

Achieving a sustainable balance between employment growth, residential growth, and availability of affordable housing is one of the greatest challenges facing many regions in the U.S., including the North Olympic Peninsula. Many regions that experienced dynamic growth in the booming years of the 1990s struggled to strike that balance, resulting in a steep decline in affordability.

Sustainable economic development is not possible if jobs are concentrated in areas where most workers cannot afford to live. There are myriad factors that affect housing affordability, such as supply and demand, per capita income, zoning, and more, but the relationship between housing and economic development must be addressed if regions are to avoid the problems associated with rapid suburbanization resulting from lack of housing affordability in growing urban areas.

Steady population and employment growth, combined with development patterns that result in increased instances of suburbanization and commute times, have presented difficult challenges to maintaining the region’s well-regarded quality of life. If the majority of high-paying jobs in the region remain concentrated in the urban cores, and local job creation does not keep up with the high rates of residential development, then those challenges will only increase as this region continues to grow in the immediate future.

Affordable housing, despite how the term is often used, is not exclusively about building low- cost, in-fill development homes for low-income residents in urban parts of a region. Maintaining affordable housing requires a comprehensive approach to residential development that allows for a range of housing options, costs, and locations. The challenge in the region is to address housing as part of a regional planning strategy that includes transportation, workforce development, and economic development programs.

Alternative Energy

There is strong interest in making the North Olympic Peninsula less dependent upon outside resources regarding our daily sustenance. To this end, there is a strong and growing initiative to utilize existing natural resources to become more self-sufficient in meeting our energy needs through the use of biomass, wave power, wind and solar energy.

• Biomass from forest, farm and human waste can be used to generate electricity through methane generation or direct combustion in co-generation facilities.

• Biomass from commercially grown terrestrial crops such as canola seed, switch grass and even fly larvae or from aquatic crops such as algae can be used to produce various biofuels including biodiesel and ethanol.

• Wave energy and the energy from ocean currents are readily available in the Straits. Some experimentation using wave energy to generate electricity is currently underway in Neah Bay.

• Wind energy is a viable source of electricity in selected areas of the peninsula, but has yet to be developed.

• Solar energy is also sufficient, especially in the Sequim-Dungeness area, but at this time only a small number of homes are using solar energy as a designed source of heat or incorporate photovoltaic panels for electric power.

To coordinate these diverse efforts, Peninsula College has formed the North West Institute for Renewable Energy (NWIRE) under its Center of Excellence to further this increase in self-sufficiency focusing on three areas of education, product development and research.

Also under development is an eco-industrial park that combines energy related businesses in one area, where the waste stream of one enterprise is the feedstock of another, thereby eliminating the concept of waste and increasing competitive advantage without the need for continual growth.

Multi-County Cluster Development

PDA recognizes that for the North Olympic Peninsula (NOP) to be able to strengthen the region’s economic base, work must be completed to synchronize the clusters. Previous cluster analysis in 2002 within Jefferson County indicated similar sectors to the established clusters within the Clallam netWorks organization. Regrettably, formal clusters were never established in Jefferson County. Clallam netWorks clusters are experiencing a lack of focus in varying degrees. The PDA must identify value-chain clusters for the entire NOP by conducting an updated analysis of the regional clusters to spot industry sector gaps that could be targeted for expansion or development within the "broader" region.

PDA must assist Jefferson County in securing technical assistance in updating the 2002 data and lead the formation of regional clusters for business support, development and targeted recruitment.

The PDA will become the regional economic development organization that will lead a multi-year phased project. The organization recognizes the need for planning a strong regional approach to economic development that blends its established processes with the new planning strategies. Jefferson County sees the benefit of cluster development and aspires to become an equal partner in the PDA’s cluster approach. Additionally, Clallam County has been recognized as a leader in cluster work, and strives to develop the next steps in successfully leveraging the cluster model.

Therefore, in recognition of local, regional, state and federal support of the cluster model, the Peninsula Development Association have initiated steps to develop a comprehensive, phased cluster approach that will become a model for Washington State Community Trade and Economic Development and the Economic Development Administration. This approach will reflect a regional economic development process that supports prioritized projects within the industry cluster as portrayed in the CEDS document. The Peninsula Development Association anticipates the application for additional technical support and funding at each phase.

PDA Strategies

Strategy 1: Support Comprehensive Small Business Services

Activities:

• Continue to reach out to businesses in more remote areas of the region and support the delivery of services via distance learning and teleconferencing

• Promote business access to capital through revolving funds, banks, tribes, and venture capital outlets, and other state and local sources through industry clusters

• Continue to give referrals to Washington Manufacturing Services to provide fee-for-service technical assistance for business

• Continue to support the Clallam Business Incubator, WSU Small Business Development Centers and SCORE Counselors, ICN Building

Strategy 2: Increase Business Development Opportunities

Activities:

• Collaborate with the District’s two economic development agencies and other parties (e.g., cities, ports, tribal entities, etc.) in their recruitment efforts

• Promote the retention and expansion of existing businesses

• Promote the use of industry cluster teams using cluster-based approaches

• Support the participation on the Washington State Community, Trade and Economic Development’s Business Retention and Expansion (BRE) process.

• Support the research, development, and marketing of value added secondary products specifically in forest resources and agriculture

• Collaborate with local Public Development Authorities on strategies and projects

• Assist the appropriate economic development entity with funding proposals that support further appropriate economic development

• Encourage, support, develop and host business education outreach programs

Strategy 3: Support Infrastructure Development Projects

Activities:

• Work with ports, counties, public utility districts, and cities within the District to define short- and long-term strategies for industrial park and high-tech campus development

• Review and promote local infrastructure development inside UGA areas, particularly in the areas of business parks, solid waste, and air service

• Encourage the development of telecommunications infrastructure throughout the District to allow for broad bandwidth, redundancy, and capacity to meet the future needs for voice and data transmission

• Encourage the development of a network of business incubator buildings for entrepreneurial enterprises throughout the District

• Foster partnerships with the ports, counties, cities, state, and federal governmental agencies to finance new construction

• Provide support for projects that generate jobs

• Monitor the state-mandated Growth Management planning process to ensure adequate land and services are available for targeted light manufacturing and high tech enterprises


Strategy 4: Promote Intergovernmental Collaboration

Activities:

• Become the model of an environment within the region of cooperation and partnership among the various jurisdictions resulting in better coordinated implementation of prioritized economic development projects

• Acknowledge strategies that are consistent among local comprehensive plans

• Encourage more user-friendly, efficient, and predictable systems for business permitting in jurisdictions throughout the region

Strategy 5: Promote Entrepreneurial Investment

Activities:

• Work to nurture a culture of entrepreneurship on the North Olympic Peninsula

• Support the development and marketing vocational training opportunities

• Support the expansion of entrepreneur training programs and courses on the North Olympic Peninsula

• Support through entrepreneurial referrals, the Clallam Business Incubator, a regional business support entity

Strategy 6: Workforce Investment

Activities:

• Encourage the capacity of local institutions and school districts to provide basic work-force readiness skills to help all students find and hold jobs

• Support the expansion of educational opportunities through telecommunications

• Support the increase of training institutions’ capacity, such as community colleges, to upgrade work-force skills and increase productivity

• Assist local area educational institutions in assessment processes, innovative program development, leadership and organizational development and training and capacity-building services

Strategy 7: Leadership Development

Activities:

• Support programs that foster leadership development and civic involvement

• Continue efforts to serve as conveners of community efforts and catalysts for economic development

• Support local-level planning to develop shared visions for communities and encourages the incorporation of local planning efforts into local and regional plans

Strategy 8: Create New Financial Investment Pools on the North Olympic Peninsula

Activities:

• Initiate linkage w/ existing asset management concerns on the North Olympic Peninsula (estate lawyers, investment managers, trust officers, etc.) to introduce PDA initiatives and member activities

• Lead a coordinated effort to promote existing non-traditional debt sources already available on the North Olympic Peninsula (Shorebank, Cascadia, USDA RD, Angel Funds, etc.)


Strategy 9: Economic Development Policies

Activities:

• Take a leadership role on the North Olympic Peninsula in working with Federal and State agencies to develop and implement broad policies and procedures that encourage economic progress

• Collaborate in the review and coordination of County, City, PUD, Tribal and Port Comprehensive Plans

Strategy10: Affordable Housing

Activities:

• Promote the identification of tools and programs to decrease infrastructure costs for development of affordable housing

• Support development of affordable starter homes

• Explore links between housing and economic development


Strategy11: Healthcare

Activities:

• Partner in the attraction of services to underserved areas of the region

• Advocate for affordable health care through collaboration

• Study the availability of affordable health care services to improve understanding of access to care in all areas of the region through regional healthcare cluster

• Support best practices in health care collaboration to help address the need for affordable solutions among large and small employers, as well as self-employed people

Strategy 12: Support Regional Cluster Development

Activities:

Benchmark Regional Clusters
• Identify regional clusters by updating Jefferson County’s previous work

• PDA shall support the formal clusters organization within Jefferson County

• Model and map systemic relationships between like clusters within the two counties.

Engage Regional Clusters
• Formalize communications channels between the two counties through the PDA

• PDA shall foster inter-firm collaboration through the two counties economic agencies

Organize/Deliver Services
• Organize and disseminate information by cluster

• PDA should lead the development of cross agency cluster teams

• PDA shall facilitate external cluster connections with public sector, education, investment networks and cluster growth opportunities.

Continue to Build Specialized Work Forces
• Support existing networks available in Clallam and Jefferson counties to qualify people for employment within the clusters

• Support established cluster skill centers and the creation of new virtual networks where needed within remote parts of the two counties

Stimulate Innovation and Entrepreneurship
• PDA shall seek unique investment vehicles that fund cluster innovation and business start-ups

• Continue support of the various existing and proposed cluster based incubators

• Encourage entrepreneurs’ networks

Market/Brand the Region
• PDA shall promote funding for targeted inward investment for marketing the region

• PDA will promote branding efforts within the North Olympic Peninsula’s tourism committees and organizations

Allocation of Resources/Investments
• PDA should encourage incentives or set aside funds for multi-firm projects that link two companies from the two counties

• PDA shall work with the two county’s economic agencies to develop a strategy that will invest in cluster R&D

Summary
North Olympic Peninsula residents will have the skills and knowledge necessary to compete in the world economy in the 21st century. The PDA shall act as a conduit of resources for the communities to have the physical infrastructure necessary for self-sustaining economic development and improved quality of life. The people and organizations of the region will have the vision and capacity to mobilize and work together for sustained economic progress and improvement of their communities. Additionally, North Olympic Peninsula residents will have the access to financial and technical resources to help build dynamic and self-sustaining local economies and businesses will have access to quality technical assistance.

The PDA shall take a leadership role in working with Federal and State agencies to develop and implement broad policies and procedures that encourage economic progress. The PDA shall support policies and programs that develop leadership skills within the communities and the PDA will be a leading entity in the development and capitalization of new investment capital for economic development projects. The PDA will support the expansion of business assistance and resources through business incubators through a cluster based economic development.